For the Quarter Ending September 2024
North America
In Q3 2024, the Ethylene Dichloride (EDC) pricing landscape in North America remained stable, with the USA experiencing the most significant price changes. Several factors influenced market prices during this quarter. The stability in prices can be attributed to balanced supply and demand dynamics, with moderate to low demand from downstream industries like PVC contributing to the overall stable market conditions.
Additionally, the steady production and balanced feedstock prices in the region played a crucial role in maintaining price stability for EDC. In the USA specifically, the market saw minor fluctuations, with a 5% increase from the previous quarter but a notable decrease of 43% compared to the same quarter last year. The price remained consistent throughout the quarter, indicating a stable pricing environment.
The latest quarter-ending price for Ethylene Dichloride (EDC) FOB USGC in the USA stood at USD 245/MT, reflecting the prevailing stable sentiment in the market. Overall, the pricing trends in Q3 2024 for EDC in North America showcased resilience and equilibrium, with prices holding steady amidst various market challenges.
APAC
APAC region continued to be a pivotal market for EDC, driven by rapid industrialization and urbanization in countries like China, India, and South Korea. China remained the largest market due to its substantial production capacity and consumption levels.The demand for EDC was primarily driven by the Vinyl Chloride Monomer (VCM) industry, which uses EDC as a precursor. The expanding manufacturing base and increasing infrastructure investments in India also contributed to the growth. The price trend of EDC remained relatively stable throughout the third quarter. However, the downstream demand from the PVC sector did not improve significantly, which in turn failed to provide sufficient support to EDC prices.The region faced challenges such as geopolitical tensions affecting raw material costs and environmental concerns related to EDC production.Despite the challenges, the APAC region is expected to register the fastest CAGR growth globally, driven by ongoing industrial expansion and increasing investments in chemical production facilities.
Europe
Throughout Q3 2024, the Ethylene Dichloride (EDC) market in Europe remained stable, with prices in the Netherlands showcasing the most significant changes. Various factors influenced market prices during this quarter. The stability was primarily driven by balanced supply and demand dynamics, along with cautious buying behaviour from downstream industries. High production costs, stemming from elevated crude oil prices and feedstock ethylene costs, also played a role in maintaining stable prices. The market also experienced disruptions in the supply chain due to high freight charges and geopolitical uncertainties, further contributing to price stability. In the Netherlands, the quarter saw a notable price change compared to the same period last year, with prices increasing by 6%. However, the quarter-on-quarter charge recorded a significant 12% increase, indicating fluctuations in market dynamics. The quarter ended with Ethylene Dichloride (EDC) priced at USD 365/MT FD Rotterdam in the Netherlands, reflecting the overall stable pricing environment prevalent throughout Q3 2024.
MEA
In Q3 2024, the Ethylene Dichloride (EDC) market in the MEA region experienced a period of declining prices, with significant factors influencing this trend. The market was heavily impacted by a combination of decreased demand from downstream sectors, such as the PVC industry, and increased production costs. These factors led to a negative market sentiment, with prices experiencing a notable decrease of 4 % from the previous quarter in 2024. Additionally, compared to the same quarter last year, prices saw a substantial decline of 23%, reflecting the challenging market conditions faced by EDC producers. Saudi Arabia in particular witnessed the most significant price changes in the region. The pricing environment in the country displayed a consistent downward trend throughout the quarter, with prices falling by 5% between the first and second half of Q3. This decline culminated in the quarter-ending price of USD 265/MT for Ethylene Dichloride Ex-Riyadh in Saudi Arabia. The overall trend in the region indicated a negative pricing environment, driven by a combination of decreased demand, high production costs, and challenging market dynamics.
South America
In Q3 2024, Ethylene Dichloride (EDC) pricing in the South America region remained stable, reflecting a consistent market environment. The stability was influenced by various factors, including balanced supply and demand dynamics, stable production costs, and cautious downstream demand. The pricing trend in this quarter was predominantly driven by the equilibrium between production expenses and market demand, leading to price stability across the region. Brazil, in particular, experienced notable price changes during this period, with fluctuations remaining minimal. The overall trends in the region indicated a correlation between stable production costs and subdued demand from the downstream PVC market. Despite a 43% decrease from the same quarter last year, the quarter-on-quarter change of 4% signified a slight uptick in pricing. Additionally, the comparison between the first and second half of the quarter showed no significant price variance, highlighting the consistent pricing trend throughout the period. Ultimately, the quarter concluded with Ethylene Dichloride (EDC) priced at USD 271/MT CFR Santos in Brazil, underscoring the prevailing stability in the pricing environment.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Ethylene Dichloride (EDC) market experienced a notable downturn, driven by several critical factors. The construction industry, a significant consumer of EDC-derived products like Polyvinyl Chloride (PVC), has registered a marked slowdown, particularly in housing applications. This stagnation in the construction sector, coupled with low trading activities and weak buying interest from overseas markets, has further depressed EDC prices.
Focusing specifically on the USA, where the maximum price changes have been observed, the overall trend for Q2 2024 has been decidedly bearish. The seasonality typically associated with increased demand ahead of summer did not materialize, leading to a -48% change compared to the same quarter last year and a -15% change from the previous quarter in 2024.
The significant decline in crude oil prices during May 2024 and the consequent reduction in raw material costs have also played a crucial role. However, logistical challenges have compounded the rebounded price trajectory during June as the quarter ended with the price of Ethylene Dichloride (EDC) at USD 193/MT DEL Houston, reflecting a positive pricing environment.
APAC
During Q2 2024, the Ethylene Dichloride (EDC) market in the APAC region faced a persistently declining pricing environment. The significant factors influencing market prices included sluggish demand from downstream sectors, a surplus supply situation, and declining upstream costs. Due to declining feedstock ethylene prices, the abundant inventories and reduced trading activities, particularly from the construction and packaging industries, exerted sustained downward pressure on EDC prices. Additionally, the overall bearish sentiment was compounded by macroeconomic uncertainties, leading to cautious procurement and infrequent spot market transactions. Focusing on Japan, the country experienced the most substantial price adjustments within the region. The correlation between reduced demand and excess supply drove prices downward, accentuated by the seasonal lull typical of Q2. From the previous quarter in 2024, prices decreased by 5%, underscoring the continuation of the negative pricing trend. Concluding the quarter, the latest price for Ethylene Dichloride (EDC) CFR Nagoya in Japan stood at USD 335/MT. This decline underscores a negative pricing environment, driven by a confluence of weak demand, ample supply, and subdued market activity.
Europe
In Q2 2024, the European Ethylene Dichloride (EDC) market has experienced notable downward price pressure. The broader market sentiment has been characterized by excess supply and weak purchasing activity, compounding the downward momentum. The PVC market's sluggish performance has also played a critical role, as the demand for EDC, a key feedstock, remained lackluster during April 2024. This quarter has seen a confluence of factors driving market prices lower, including declining crude oil prices during May 2024, subdued demand from downstream sectors, and high inventory levels. Focusing specifically on Germany, where EDC prices underwent the most significant changes, the overall trend has been downward. Seasonality factors, such as reduced construction activity during the summer months, have exacerbated the decline in demand. The correlation between the decrease in upstream ethylene prices and downstream PVC prices has been evident, reinforcing the negative price trajectory. However, the logistical challenges and competitive import pressures have increased the pricing environment during June 2024, while the overall market outlook was bearish.
MEA
During Q2 2024, the Ethylene Dichloride (EDC) market in the MEA region experienced a notable decline in prices, driven by several key factors. The primary catalyst was a persistent oversupply amidst dwindling demand from downstream sectors, particularly the PVC industry during April 2024. This imbalance was further exacerbated by a significant downturn in upstream ethylene prices, which diminished production costs and exerted downward pressure on EDC prices during May 2024. Additionally, geopolitical stability and stable crude oil supply contributed to a bearish market sentiment, as the anticipated supply disruptions did not materialize, leading to an unexpected surplus. Focusing on Saudi Arabia, the region saw the most pronounced price fluctuations. The overall trend throughout the quarter was decidedly negative, influenced by seasonal factors such as lower construction activity, which typically peaks during other quarters, diminishing demand for EDC. Compared to the previous quarter in 2024, the decrease was recorded at -2%, indicating a continuing downward trajectory. In conclusion, the latest quarter-ending price stood at USD 281/MT Ex-Riyadh, reflecting the prevailing sentiment of a negative pricing environment throughout Q2 2024.
South America
Throughout Q2 2024, the Ethylene Dichloride (EDC) market in South America witnessed a significant downturn in prices, with Brazil experiencing the most substantial price changes. However, in June 2024, the prices rebounded due to extended delivery times and disruption in the supply chain activities due to torrential rains. While the overall decline was primarily influenced by a combination of factors affecting the market dynamics. A notable decrease in demand from downstream industries, coupled with competitive pricing pressures and increased availability of cheaper imports, contributed to the downward trajectory of EDC prices in the region during April 2024. Moreover, the ongoing global economic uncertainties and fluctuations in crude oil prices, a key feedstock for EDC production, further compounded the negative sentiment in the market during May 2024. In Brazil, the quarter-on-quarter change reflected a negative trend, with prices falling by -14. The quarter-ending price for EDC in Brazil stood at USD 261/MT CFR Santos, highlighting the prevailing bearish sentiment in the market.
For the Quarter Ending March 2024
North America
In first quarter of 2024, the North America region's Ethylene Dichloride (EDC) market continued facing challenges that have influenced pricing dynamics. The previous quarter saw a decline in EDC prices due to an oversupply of the product and low demand from the downstream PVC industry.
These factors were further exacerbated by reduced construction activities and a weakened economic recovery. This uncertainty had a bearish effect on the market. Additionally, stability in the upstream market of ethylene and the decline in crude oil and naphtha prices also influenced EDC prices during the previous quarter. Similar market conditions were observed in the United States, with low demand from the downstream PVC industry and surplus inventory levels contributing to the decline in EDC prices.
The concerns surrounding US shipments to Asian markets due to the Red Sea incident further dampened the outlook in regional PVC markets. However, it is worth noting that the US market remained stable in terms of supply, with no reported plant shutdowns during the previous quarter. Factors such as surplus supply, low demand, concerns about shipping disruptions, and stability in upstream markets are expected to influence prices. Additionally, the market may also be impacted by any reported plant shutdowns, which could further impact prices. Overall, the first quarter of 2024 witnessed a continuation decline in EDC prices in the North America region, driven by the aforementioned factors. The United States market experienced similar conditions, with low demand from the PVC industry and uncertainties in Asian markets.
APAC
During the first quarter of 2024, the Ethylene Dichloride (EDC) market in the APAC region faced various factors that impacted prices in the industry. The market experienced a decline in prices primarily due to the low costs of feedstock ethylene, crude oil, and naphtha in exporting countries. This decrease was further influenced by the presence of ample EDC inventories within the region, which added to the downward pressure on prices. Certain sectors, such as real estate and agriculture, saw limited activity, although the construction sector remained stable. Downstream buyers of PVC expressed concerns regarding rising freight rates, particularly with significant EDC exports from the United States and Saudi Arabia. The situation was worsened by attacks on international ships in the Red Sea, leading major shipping lines to raise freight rates to Asia. Despite OPEC production cuts, crude oil prices remained stable as the USA maintained normalized supply levels, preventing unfavourable price increases. Overall, these factors contributed to a bearish market sentiment and a decline in EDC prices. As of the current quarter, the price of Ethylene Dichloride (EDC) FOB Busan in South Korea is USD 345/MT.
Europe
In the first quarter of 2024, the Ethylene Dichloride (EDC) market in Europe continued to face challenges, albeit with some positive developments. One of the key factors affecting the European EDC market was the scarcity of Naphtha supply. This scarcity was primarily driven by the rising prices of Crude Oil, which is the primary feedstock for EDC production. The higher prices of Crude Oil put pressure on the European market, making it difficult for producers to maintain stable production rates. However, despite these challenges, the demand for EDC from the downstream Petrochemical industry remained strong. This strong demand helped shape market dynamics and provided some stability amidst the supply chain disruptions. In German, the EDC market saw a mixed performance during this quarter. However, the oversupply of EDC in Europe ultimately led to a decrease in prices towards the end of the quarter. The high supply of EDC in the market caused prices to decrease, resulting in a bearish trend for the European EDC market in the first quarter of 2024. Despite the decrease in prices, there were no significant disruptions reported in the supply chain. The stable demand for EDC in Europe during this period was driven by various industries, including PVC, solvents, and other chemicals. These industries maintained their demand for EDC, contributing to the stability in the market. It is worth noting that no significant plant shutdowns were reported in the European EDC market during this quarter, further supporting the stability of the market. In conclusion, the Ethylene Dichloride (EDC) market in Europe continued to face challenges in the first quarter of 2024, with low production rates and oversupply issues affecting stakeholders. The German market experienced a surge in prices initially due to market stability, but ultimately saw a decrease in prices due to oversupply. No significant plant shutdowns were reported in the European EDC market during this quarter.
MEA
Quarter 1 of 2024 in the Middle East and Africa region for Ethylene Dichloride (EDC) was influenced by various factors. The market sentiment was subdued due to sluggish demand and limited trading activities. Geopolitical tensions were heightened by the Houthis' announcement of potential threats to Indian Ocean traffic. This added uncertainties to market dynamics, especially in terms of maritime trade routes and logistics. Saudi Arabia experienced little changes in pricing, with indications of high inventories for oil and oil cracks, possibly leading to destocking and production reduction. EDC supply levels remained stable throughout the quarter, with Saudi Arabia adjusting exports to India and Southeast Asia to meet market demands. In terms of pricing, Saudi Arabia's trend and seasonality in Q1 2024 remained relatively stable compared to the same quarter of the previous year. However, there was a slight decline of 2% in price percentage between the first and second half of the quarter. Consequently, the current price of Ethylene Dichloride Ex-Riyadh in Saudi Arabia for Q1 2024 stands at USD 290/MT.
South America
The cost of Ethylene Dichloride in Brazil experienced a decline in Q1 2024, amid sparse market activity. Given Brazil's dependence on imports from the US for Ethylene Dichloride, its pricing typically mirrored trends in the US market. The US import material consistently proved to be more cost-effective than its Asian counterpart, partly due to stable logistics from the US and relatively lower logistics costs from other countries. Throughout the quarter, there were no new volume allocations for February bookings, and projections indicated an increase in inventory levels due to recent notices of price decline from producers. This price reduction was attributed to the lack of demand at both local and global levels. As a result, market participants held onto unsold inventories until mid-February, contributing to the overall quietness in the market. The Brazilian Ethylene Dichloride market closely followed the trajectory of the US market, which experienced price declines during the same period due to low demand and ample supply. This decline in spot purchases exerted downward pressure on Ethylene Dichloride prices, contributing to the observed stability in Brazil. Despite the absence of new orders throughout the month, projections suggested a potential increase in inventory levels, especially considering recent notices of price decline from producers.
For the Quarter Ending December 2023
North America
The fourth quarter of 2023 was challenging for the Ethylene Dichloride (EDC) market in North America, particularly in the USA. The market faced several factors that impacted prices and market dynamics. Firstly, high supply levels of EDC in the market due to ample inventories and low regional demand contributed to the bearish market situation. The PVC industry, a major consumer of EDC, experienced weak consumption and destocking activities, leading to lower purchasing sentiments. Additionally, the ongoing high supply pressure and uncertain export market outlook further affected the cost aspect of EDC in the region.
Furthermore, the USA witnessed a decline in EDC prices in the fourth quarter. The prices fell by 15.8% to reach USD 255/MT, FOB USGC towards the end of the quarter. This decline was driven by the sluggish demand in the PVC sector, along with the high inventory levels and destocking activities. The market players faced challenges in making sales on lower margins amid a highly supplied market.
Overall, the EDC market in North America, specifically in the USA, faced challenges in the fourth quarter of 2023 due to high supply levels, weak demand in the PVC sector, and destocking activities. These factors led to a decline in prices, for further decreases in the coming months. In Dec 2023,the EDC in the USA for the current quarter was USD 255/MT.
APAC
The current quarter (Q4) of 2023 for Ethylene Dichloride (EDC) in the APAC region witnessed several significant factors that impacted the market and prices. Firstly, there was a moderate to high supply of EDC in the market, leading to a balanced market situation. However, the market in South Korea experienced an excess of supplies, resulting in a bearish market situation. This oversupply was influenced by the pause in purchasing sentiments across the regional market, leading to a decline in prices. Additionally, the Indian market saw a decline in prices due to an oversupplied market and modest market transactions.
In terms of specific pricing trends, the EDC prices in South Korea experienced a significant change during the quarter. The price percentage change from the previous quarter was -10%, indicating a decrease in prices. However, when compared to the same quarter of the previous year, there was no change in prices. In Dec 2023, the price of Ethylene Dichloride (EDC) FOB Busan in South Korea for the current quarter is USD 335/MT.
Overall, the APAC region experienced a mixed market situation for EDC in Q4 2023, with supply levels and market sentiments playing a crucial role in determining the price trends.
MEA
The MEA region experienced a balanced market situation for Ethylene Dichloride (EDC) in Q4 2023, with low to moderate supply and demand. EDC prices in the Saudi Arabian market displayed a downward trend due to low supplied market, as the market transaction remained on the increase in the regional downstream PVC industry while players already had lower levels of inventories.
Additionally, the adequate availability of inventory to meet recent orders within the regional market also diminished the demand-supply gap. The destocking sentiments among market players and high input cost pressure amidst surged crude oil values further weighed on the price momentum.
The SABIC at Al Jubail scheduled maintenance shutdown for 31 days in December 2023 with a total EDC production capacity of 68917 TPM, which may cause a shortage of supplies and drive the prices of the commodity. The prices are declined by 13% in Q4, 2023 when compared with the previous quarter. The December 2023 price of Ethylene Dichloride Ex- Riyadh in Saudi Arabia was USD 289/MT.
Europe
The fourth quarter of 2023 was challenging for the Ethylene Dichloride (EDC) market in Europe. Limited supply, high input costs, and production cuts were the primary factors affecting the market and prices during this period. The industry faced upward pressure from high crude oil prices, which led to modest inventory availability and impacted the current prices of the commodity. Additionally, downstream demand for EDC in the PVC production segment showed a marginal momentum, influenced by high interest rates and a slow increase in regional demand.
In the Netherlands, the EDC market experienced significant changes in prices. The market situation was bullish, with low supply causing upward pressure on input prices and bottlenecks in inventory availability. The trend, seasonality, and correlation price percentage for the country in the fourth quarter of 2023 were not available. In comparison to the same quarter of the previous year, there was a 6% increase in prices.
Overall, the EDC market in Europe faced supply constraints and increased input costs, leading to price fluctuations. The Netherlands experienced significant changes in prices, with low supply and bottlenecks in inventory availability. In Dec 2023, the price of Ethylene Dichloride (EDC) FD Rotterdam in the Netherlands was USD 346/MT.
For the Quarter Ending September 2023
North America
In the quarter ending September 2023, the EDC market experienced a notable dip in prices, as a consequence of weakened international demand and a surplus of stock. The first half of the quarter saw a steady decline in offers, amid lackluster overseas buying interest and subdued local market activity. The North American EDC price decline was exacerbated by plant shutdowns within the downstream PVC-producing units during August. The fading PVC industry offtakes of EDC in Asian markets was the primary driver behind this pessimistic outlook, with industry insiders simultaneously reducing production run rates in the line of ample supplies in the US market to buyer reluctance in anticipation of further price drops. In September 2023, the EDC market in the US continued to be hampered by lackluster international sales and an oversupply of the product. Traders resorted to selling below producer price levels, while surplus stocks, particularly in the subdued downstream PVC industry. Consequently, a substantial decline in overseas offers, combined with the bearish regional demand, was the driving force behind the considerable EDC price slump in the US market. Moreover, the producer price index, as per data from FRED, continued its descent from the preceding month, standing at 319.62 in September 2023.
APAC
The EDC market in Asia faced a slump in the quarter ending September 2023, driven by reduced regional demand in the oversupplied market. Concurrently, the downstream PVC sector remained stable due to uncertain consumer confidence. Production rates were on the rise, but a Typhoon disrupted operations, leading to subdued domestic purchasing sentiment for EDC. EDC prices in China have stabilized, accompanied by a surge in PVC demand in the middle of the quarter. Ample stock availability bridged the demand-supply gap, creating a well-balanced market. Despite the earlier operational disruptions caused by the Typhoon, market players raised prices to safeguard their margins amid global price increases. Notably, China's manufacturing industry saw an increase in the Purchasing Manager Index (PMI) to 49.7% in August, a 0.4% improvement from the previous month, reflecting a more prosperous manufacturing landscape. Nevertheless, international markets experienced a drop in purchasing enthusiasm due to lingering economic uncertainty in the region in September 2023. The holiday season in China in the first week of October 2023 led to pre-purchasing activities and resulted in a marginal change in EDC prices. Furthermore, the reduced production run rates again prompted the EDC price journey from a subdued market to a revived one showcasing the industry's resilience.
Europe
In the quarter ending September 2023, the European EDC market witnessed relative stability in the price dynamics. With regional participants returning from their summer holiday, cautious pre-purchasing activities occurred amongst the regional buyers, and manufacturers briefly kept the EDC prices at a modest low. August's downstream PVC industry procurement woes, fueled by high interest rates, had cast a shadow over EDC consumption in the first half of the third quarter. The upstream Ethylene prices inched upward in September 2023, mirroring the surge in crude oil futures, thus adding cost pressures for EDC producers. The inflation further complicated production concerns, and was prompted by the ECB's last interest rate hike to counter inflationary pressures. Amidst these challenges, the sellers in September 2023 opted to keep the prices of commodities on the low to moderate side. The downstream PVC market had seen marginal changes in the September prices due to steady downstream demand, consistent international inquiries, and low inventory levels. The domestic buyers adopted a wait-and-see approach, leading producers to reduce inventories at lower profit margins. Economic and geopolitical uncertainties, along with tightening financial conditions, had deteriorated demand, with the economic sentiment index witnessing a gradual decline in the Eurozone during this quarter.
Middle East Asia
In the quarter ending September 2023, EDC prices in the Middle East Asian market experienced a significant drop amidst a moderate increase in the downstream demand from the PVC processing segment. The quarterly decline in EDC prices was mainly due to low demand in the downstream PVC market and an excess of available supplies in the regional market. Market participants noted that there was an abundance of supplies, which kept demand down, especially because of reduced export demand from India and stable domestic downstream sales. The decrease in the middle of quarter 3 of 2023 in international orders has led to further price reductions, particularly for lower-end products, as EDC converters have been facing lower sales of their end-user PVC industry this quarter. In addition, the oversupply situation has compounded the challenges in the Saudi Arabian EDC market. Additionally, it's worth mentioning that the Consumer Price Index (CPI) in Saudi Arabia increased by 2.0% in August, and the Purchasing Managers Index (PMI) is on the rise, reflecting improved business sentiments in the country, with the latest Saudi data recording a PMI score of 57.2 points.
South America
The EDC market witnessed a significant price decrease during the third quarter of 2023, due to reduced regional demand and an excess availability of inventory for the time being. In the initial half of the quarter, there was a consistent decline in EDC prices, primarily because of subdued foreign buying interest and sluggish local market activity. Plant shutdowns in North American PVC production facilities in August further exacerbated the drop in EDC export prices. The main driver of this negative trend was the declining demand for EDC in Asian markets, which prompted industry insiders to lower operational rates in the Latin American region, as buyers were hesitant, expecting further price declines. In September 2023, the EDC market continued to face challenges with lackluster international sales and an oversupply of the product. Traders resorted to selling EDC at prices below those set by producers, particularly due to surplus stockpiles in the struggling downstream PVC industry. Consequently, a substantial decline in international offers, combined with weak regional demand, played a significant role in the price decrease for EDC in the American market throughout the third quarter of 2023.
For the Quarter Ending June 2023
North America
The price of EDC (Ethylene Dichloride) fell in the second Quarter of 2023, backed by several factors, including weak demand from the PVC manufacturing industry, lower feedstock Ethylene prices, and supply chain disruptions. The slowdown in residential construction in the United States contributed to the decline in EDC demand in the PVC industry. The decrease in sales and profit for the PVC producers, the challenging global economic environment, and macroeconomic factors weighed on the commodity performance this Quarter. In the H1 of Q2, the downstream PVC industry was affected by rising interest rates to limit inflation in the country. Furthermore, despite production issues faced by major producers, including Formosa Plastics Corp. USA and Westlake Corp., PVC demand remained. Conclusively, these restrictive financial conditions and inflation has paused the consumer purchasing power in various sector and influenced EDC price discussion in the US market. At the end of the Quarter, the US Department of Homeland Security (DHS) banned the inflow of Chinese imports of PVC to keep forced labor practices out of the US supply chain, and this ban impacted the EDC prices, and market players stabilized the prices towards the end of June.
APAC
According to the latest data, EDC (Ethylene Dichloride) prices exhibited a downward trend in the Quarter ending June 2023 in the APAC market. The market participants were concerned about the gloomy demand in the PVC production sector of the country. The inadequate revival of the economic condition in China deprived the consumer buying enthusiasm in the domestic market, and sluggish offshore trading activities further affected EDC's pricing movement in this Quarter. Moreover, the volatility in the upstream crude oil prices and lower feedstock Ethylene supported the price decline for EDC in Q2. However, manufacturers opted to reduce production run rates in the face of bearish market transactions in the H2 of the Quarter. In the H1 of Q2, the downstream processing industry deteriorated following the Holiday season. Moreover, the export demand slumped, and rising interest rates weighed on the PVC industry offtakes across the regional market. Traders continued to experience oversupplied market since the Labour day Holidays in May 2023 and the drop in crude oil costs and feedstock Ethylene prices.
Europe
In Europe, EDC (Ethylene Dichloride) prices were low in the Quarter ending June 2023, backed by the lower offtakes in the downstream sectors, including the PVC manufacturing segment. The major factor influencing EDC demand in the PVC industry was a steep decline in construction offers and ample availability of inventories as interest rates continued to increase and weighed on consumer spending throughout the Quarter. The market players closely monitored market conditions and adopted strategies to navigate this period of decline amidst financial stress by reducing production rates, focusing on balancing costs and maintaining a stable supply chain. Meanwhile, the reduction in the EDC prices resulted from the lower feedstock Ethylene costs during this time frame. The slowdown in the global economic condition resulted from persistent repercussions such as restrained investment, increasing debt vulnerabilities, and shortages in funding in the regional market. It conclusively diminished PVC offers and high inventories are the major factors that impacted the EDC prices in the second Quarter of 2023.
Middle East Asia
In the second Quarter of 2023, the price of EDC in Saudi Arabia experienced a downward trend. This was primarily due to reduced demand in the PVC manufacturing sector, which was affected by the festive season in April 2023. Although there was a slight improvement in construction activities in May, it was not significant enough to drive up demand from the PVC to impact the EDC prices due to the high supply levels. Furthermore, buyer confidence in Saudi Arabia declined towards the end of June 2023 due to sluggish offshore demand for EDC and a slow trading atmosphere following the EID holidays. The economic slowdown in the region also contributed to a decrease in purchasing enthusiasm and profit margins for manufacturers and traders. As a result, EDC prices in the region declined during the second Quarter of 2023. Meanwhile, the availability of cheaper ethylene, increased production rates, and rising employment rates prompted market participants to lower their prices in response to reduced input costs in Saudi Arabia throughout the Quarter.
For the Quarter Ending March 2023
North America
During the first quarter of 2023, there was a significant decrease in the price of Ethylene Dichloride (EDC). Despite this, the price of the product increased in the US market during the first two months due to improved demand from the downstream PVC industry and moderate supply during January and February. However, in March 2023, the price of EDC fell by approximately 14% in the US market due to disruptions in product exports caused by the labor strike on the US West Coast Port. This strike declined overseas demand for the product and affected pricing dynamics. In contrast, the price of feedstock Ethylene declined by about 7% in January, while prices increased by approximately 6.5% and 9% in February and March, respectively. The price of EDC had a direct impact on the downstream PVC industry throughout the United States in Q1 2023.
APAC
In the first quarter of 2023, the price of EDC increased in the Asian market. Demand for the product from the downstream PVC industry was high for the product, In January and February, the price of EDC increased in the Indian and Chinese markets due to the increased demand from the downstream PVC industry. In this quarter, the construction sector improved after so many uncertainties, such as COVID restrictions, while the supply remained stable during this period. However, in March 2023, the price of the product did not change, with prices hovering at USD 546/MT, Ethylene Dichloride (EDC) FOB-Shanghai (China). The balanced gap between demand and supply during March 2023 supported the price trend for the product during this month. The price of EDC directly impacted the price of PVC in Asia as most of the EDC is used in the PVC industry.
Europe
In the European market, the price of EDC increased during Q1 2023 as the demand rose from the downstream construction sector in Europe. In Q1 2023, the supply of products was low to moderate as the European market was affected by a labor strike at the Port of Hamburg, Germany. The port is the busiest in the nation and the second busiest in Europe, and the strike resulted in a decrease in supply, causing prices to increase. However, the price of the product in March 2023 remained the same due to the balanced gap between demand and supply. The price of EDC directly impacted the price of PVC as Ethylene Dichloride (EDC) is an important raw material in the production of polyvinyl chloride (PVC), a widely used plastic material. Therefore, the price and availability of EDC had a significant impact on the PVC market.
For the Quarter Ending December 2022
North America
In Q4 2022, the price of Ethylene Dichloride (EDC) in the US increased in Oct in the wake of brisk spot discussions and high offtakes of Ethylene Dichloride, which put pressure on the suppliers to fulfill the consumer’s requirement. Elevated energy and utility costs and healthy demand forced the producers to increase their production rate. However, in the next two consecutive months, the price trend showcased a weak trading trend. Due to prolonged financial and economic crises, demand and trading have been repressed in the US market. In Dec, the price of EDC in the USA declined to USD 761/ton FOB USGC.
Asia Pacific region
In this quarter, the price of Ethylene Dichloride in China remained suppressed for consecutive months due to weak market offtakes and limited trading activities. In Dec, the price of Ethylene Dichloride in China declined to USD 461/ton FOB Shanghai. In terms of supply, the market fundamentals remain affected, with supply exceeding demand. It was observed that limited volumes of Ethylene Dichloride from the ports of Shanghai to other regions were deterred by limited trading dynamics. As the downstream Polyvinyl Chloride (PVC) market continued to operate at reduced rates amid the demand lull, limited restocking activity was seen in the market.
Europe
This quarter, the price of Ethylene Dichloride reduced when compared with the previous quarter. The downtrend gained momentum due to sufficient product stocks from the United Kingdom (UK) and Belgium, resulting in stockpiling of inventories within the region. Major EDC producers inched lower their product prices to clear their existing inventories by the year-end. In Dec, the price of Ethylene Dichloride in Germany declined to USD 293/ton FD Hamburg. Bearish demand, along with weak cost support, led to a lower trading environment and higher regional product availability. Unpromising demand outlook downstream, Polyvinyl Chloride (PVC) inventories also elevated in the region.
For the Quarter Ending September 2022
North America
In Q3 2022, the price of Ethylene Dichloride (EDC) remained on the lower end in the first two consecutive months, driven by rising availability and a substantial slowdown in demand from the downstream Poly Vinyl Chloride (PVC) market. Regional suppliers were grudging to cut the prices further to maintain their revenue and profit. High energy and utility costs shrank the construction sector, where Polyvinyl Chloride has significant use in producing pipes, cables, and wire insulations. However, in September, prices started to gain a stance with elevated purchasing activity and low inventories among the enterprises. In the last month of this quarter, Ethylene Dichloride (EDC) cost USD 761/ton FON USGC.
Asia Pacific
EDC's market sentiments in the third quarter of 2022 are the same as that of North America, where prices declined compared with the previous quarter. With hindered feedstock Ethylene and Chlorine market, the market stay impacted with adequate supplies and limited demand for the new stock. Imports in China from South Korea and the US likewise decreased as the offering for the new stocks was restricted, and the downstream endeavors used existing inventories. In Sept, the price of EDC slipped to USD 586/tonne FOB Shanghai. Due to economic challenges, end-use PVC demand lagged in seasonal patterns. As soon as sellers' stocks were depleted, they stopped offering aggressive prices.
Europe
In Q3 2022, the price of Ethylene Dichloride (EDC) followed a downtrend compared with the previous quarter. In Germany, the cost of Ethylene Dichloride (EDC) declined to USD 338/ton FD Hamburg. Ethylene Dichloride (EDC) prices have fallen with bearish feedstock Ethylene and Chlorine prices. In Germany, the production cost among the manufacturing units of EDC declined, and run rates were reduced due to oversupplies. The downstream PVC price in Europe remained flat, with subdued demand and lower bidding for new upcoming stocks. In addition to higher utility costs, the end-use construction industry is experiencing a bearish market in terms of demand. Despite their sufficient stock level, end users hesitated to purchase the fresh supply.
For the Quarter Ending June 2022
North America
In this quarter, the price of Ethylene Dichloride surged with accelerating demand from downstream Vinyl Chloride Monomer (VCM) and the PVC market. Major producers' overall output of Chlor-alkali and other products will remain tight through most of Q2 2022 because of extended production and power outages in the regional market. The outage further tightens the supply of feedstock ethylene and Chlorine, impacting the market sentiments. The downstream PVC market also remained under limited supply and low operating rates among the manufacturing units. We see pricing momentum continuing with high freight and transportation costs. However, exports from the US to Asian and European Nations slipped due to the bearish demand for the product from overseas suppliers.
Asia Pacific region
In Q2 2022, the prices of Ethylene Dichloride in the Asian market reduced with succeeding months due to affected purchasing appetite and muted market fundamentals. With fluctuations in crude and Naphtha values, the price of Ethylene also declined in the region owing to weak demand and deterred market sentiments. Feedstock Ethylene offers in India have crashed, taking down the costs of downstream PVC due to rising supplies and low purchasing activities affecting the price trend. Narrowed supply and demand gap resulted in the stabilized price movement for Ethylene Dichloride as bearish buying sentiments were witnessed amongst the domestic buyers in India.
Europe
In Q2 2022, the prices of Ethylene Dichloride slipped in the second half of the quarter after touching their peak in April. However, inflationary tensions and overheated resin costs, most elevated across the board, pushed European EDC purchasers to the sidelines, which has overburdened venders' previous intentions to clutch their proposals in May, considering decreased EDC supplies. Loosening demand seems to have been the critical driver of softening as obstruction has mounted given inflated levels and purchasers limit buys to their earnest necessities. The downstream PVC market cooled down in June because of reducing feedstock Ethylene and Chlorine prices. Notwithstanding, the costs stayed on the upper end; however, speeding up operating rates and facilitating local interest loosened the cost.
For the Quarter Ending March 2022
North America
The prices increased with the beginning of the quarter, but the slope was slipped in the quarter end due to deterred feedstock ethylene and chlorine market. Exports to Asian and African regions also reduced due to oversupplies and stockpiling of product in these regions which reduced the prices of EDC. However, the prices of the product started to surge towards the end of the quarter due to major turnarounds which impacted the price trend. In USA, the price of Ethylene Dichloride towards the starting of the first quarter was USD 925/ton FOB USGC.
Asia Pacific
In India, the price of Ethylene Dichloride reduced when compared with previous quarter due to slipping feedstock Ethylene and Chlorine market. However, the market sentiments improved in the month of March and prices rose due to strong downstream market. Feedstock Ethylene prices marched high with improved product demand on the back of constrained product availability in the region. On the top of that, the demand of Ethylene Dichloride in the region surged supported by price gain. Upstream crude oil prices also jumped in the Asian market due to accelerating tension between Ukraine and Russia. In India, the price of Ethylene Dichloride towards the quarter end were observed to be USD 788/ton CFR Mundra. Downstream PVC market remained on the lower end with deterred construction sector and high inventories among the enterprises.
Europe
In European market, the price of Ethylene Dichloride surged with rising tension between Russia and Ukraine. Spot prices increased, and major plant turnaround kept the prices on the upper end. Feedstock Ethylene and Chloride prices also increased with strong market sentiments and insufficient product availability. Crippling product availability in the domestic market increased the prices. However, logistics constraints and surged transportation cost created hurdle to export the product to the Netherlands and Spain. In Germany, the price of Ethylene Dichloride towards the start of the quarter were observed to be USD 1052/ton FD Hamburg. In terms of inventories, they were on the lower end with squeezed profit affecting the sales and revenue of the downstream derivative market.
For the Quarter Ending December 2021
North America
In Q4, the prices were observed to be high with strong demand compared with Q2 and Q3 and convalesce downstream market. The prices touched their height on 26 Nov in Germany where the prices were hovering in the range of $928/ton-$991/ton FOB USGC. Various factors drive EDC demand in the US market especially supply demand fundamentals and production cost. Robust downstream PVC market also gave boost to the prices. Feedstock Ethylene and Chlorine prices were also surged majorly due to Hurricane Ida which affected most of the Chlor alkali production in US Gulf coast. Imminent increase in PVC capacities in US gave more scope for domestic demand and also seek opportunity in tight export market.
Asia Pacific
Asia Pacific region witnessed high demand from chemical water treatment and PVC market in Q4 compared with Q2 and Q3. In October, RIL has committed to establishing a chemical manufacturing unit in Abu Dhabi to generate 940,000 MTPA Chlor-Alkali, 1.1 MMTPA, Ethylene Dichloride (EDC) and 360,000 MTPA Polyvinyl Chloride (PVC) facility. December prices of EDC slipped compared to other two months due to $945/ton Ex-Chennai with the declination of 9.80% where the prices in October were observed to be $1047/ton Ex-Chennai. In November, upstream Ethylene and Chlorine both have been trading lower on falling crude futures and pressured pricing environment across Asia compared to other producing regions. Market sentiments remained dampened on low PVC demand and ample stocks with the local traders.
Europe
European EDC market remained on the higher side with increment in demand with each month in Q4 and also compared to previous quarters. Demand remained robust but the supply was limited. Major Chlor alkali producer companies had introduced surcharge on their products in the face of spiralling gas and electricity cost. Feedstock Ethylene and Benzene faced degree of tightness producers had shifted from negotiation mechanism and rather increased the prices due to limited availability and higher production cost. Downstream PVC had also steadily grown, and the market balance remain firm, despite the rise in effective capacities in this quarter.
For the Quarter Ending September 2021
North America
In Q3 2021, Ethylene Dichloride (EDC) market observed an upward pricing trend in the North American region. The upsurge in the values of Ethylene Dichloride was supported by its constraint availability amidst sturdy demand from the downstream Vinyl Chloride and other segments. Volatility in the prices of upstream Ethylene also sent ripples to the EDC prices during this time frame. The industrial infrastructure in the US Gulf coast remained offline because of the arrival of the Ida hurricane that unbalanced the demand and the supply of EDC during the timeframe. For instance, force majeure was declared by Westside Chemical on its two PVC production plants in Louisiana as a repercussion to Ida hurricane.
Asia
In Q3 2021, values of Ethylene Dichloride (EDC) witnessed an exponential surge in the Asian market backed by the soaring feedstock prices. Firm demand amidst limited availability of Ethylene Dichloride in this quarter further fumed its values across the region. In India, prices of EDC soared during this quarter backed by the surging values of feedstock Ethylene and increasing demand from downstream Vinyl Chloride Monomer (VCM) manufacturers. Moreover, it was reported by the traders that several EDC facilities in the region went offline due to the seasonal maintenance that consequently increased the values of EDC. In addition, extreme rise in the freight costs and limited supply of containers further contributed to the inflation in the pricing trend of EDC during this timeframe. Hence, Ex-Kandla prices spiked from USD 719.66/MT to USD 904.64/MT in July to September timeframe.
Europe
In Europe, a marginal rise in the prices of EDC was witnessed in Q3 backed by the surge in the prices of upstream Ethylene and lower imports from the USA. The demand for EDC remained modest from the downstream Vinyl Chloride Monomer and Poly Vinyl Chloride segment backed by the curtailment in the production rates by several manufacturers due to the energy crisis in this quarter across the region. Besides, an exorbitant hike in the shipping charges and the critical shortage of containers further contributed to the spike in the pricing trend of EDC. FD-Hamburg Ethylene Dichloride prices settled at USD 745/MT in September witnessed a rise of USD 40/MT since July.
For the Quarter Ending June 2021
North America
Repercussions of freezing fallout in the Gulf of USA in mid-February, continued to disturb the market sentiments in this quarter as well. Due to the disrupted production activities in feedstock plants, prices of several downstream products including Ethylene Dichloride increased effectively, which later declined in June with improvement in supply activities. However, following the revival in economic activities, demand for Ethylene Dichloride remained firm throughout the quarter from downstream Poly Vinyl Chloride (PVC) sector, which also supported its prices in USA. Therefore, a consistent rise in prices of Ethylene Dichloride was observed, which settled at USD 660/MT in the second half of May in Texas.
Asia
Overall demand for Ethylene Dichloride remained modest in APAC region, while the prices rose effectively in China due to soaring feedstock prices. In China, prices of Ethylene Dichloride rose effectively during the quarter, supported by fuming feedstock Ethylene prices amid firm demand and inadequate availability. While in the Indian market, demand for Ethylene Dichloride from downstream Vinyl Chloride Monomer (VCM) manufacturers remained muted, due to resurgence of pandemic in the country. Sudden implementation of movement restriction reduced the consumption of PVC in the country, which eventually led to a decline in demand for upstream Ethylene Dichloride. Thus, prices dwindled in the month of May and reached USD 684/MT in India.
Europe
An astonishing rise in prices of Ethylene Dichloride was observed in the European region during this quarter. The demand fundamentals showcased sturdy growth from the downstream VCM and PVC manufacturers, backed by the improvement in economic activities than the previous quarter. Besides, critical shortage of feedstock Ethylene from USA also supported the steep rise in its prices. In the meantime, traders expected some cargoes from other regions like Asia and Middle East to counter this steep rise in these commodities.
For the Quarter Ending March 2021
North America
Stable demand amidst acute shortage, led the EDC prices to follow upward trajectory across the region during this quarter. Winter storm across USA gulf coast disrupted the production activity of several Ethylene Dichloride (EDC) manufacturing units which caused raw material shortage for the production of downstream chemicals like VCM (Vinyl Chloride Monomer) and PVC (Polyvinyl Chloride). Several plants including that of OxyChem with the capacity 680 KTPA EDC and Olin Corp. with EDC capacity 748 KTPA etc. remained idled during this time frame due to this climate calamity. Hence the prices rose effectively high by more than 30% and settled around USD 550/MT by the end of March.
Asia
The Asian market had fair demand for Ethylene Dichloride (EDC) but the supply varied country by country, hence the prices too fluctuated with demand supply fundamentals. In the Chinese market, prices showed significant variations during a week, with FOB offers hovering around USD 780/MT during mid-February. While in the Indian market, prices showed consistent growth, as the demand remained firm from the domestic market but reduction in imports of raw materials from USA and Europe created product shortage. Price of EDC rose by 44.6% since January to settled at USD 735.7/MT during March.
Europe
Europe encountered significant shortage of feedstock Ethylene, which was having high demand from other segments like Polyethylene, during the first quarter. Imports from USA were reduced under rare climatic conditions, which affected the availability of raw materials (like Ethylene) and EDC in the region. These factors lead to a sharp rise in the price of EDC across the region. In addition, imports of EDC from the Middle East were also heard to be halted due to force majeure at a major producing plant worth capacity of 890 KTPA of EDC.
For the Quarter Ending September 2020
North America
The American EDC market remained highly dynamic throughout Q3 2020 with regional producers observing a sharp pick-up in the buying behavior in response to the pent-up PVC demand, especially from the Asian markets. Power outages due to Hurricane Laura delayed start-ups of several Chlor-Alkali units in Lake Charles causing tightening in both domestic and export supply. Olin, the world's largest Chlor-Alkali producer, was heard temporarily idling Chlor-Alkali plants to manage costs and inventories. Formosa Plastics USA declared force majeure on its PVC manufacturing unit in August after an upstream chlor-alkali unit remained shut for longer than planned, causing potential shortage of EDC stocks. EDC Prices took off from the ground levels after witnessing a historic plunge (about 70%) during Q2 2020.
Asia
PVC prices in the Asian market rose amid tightened supply due to production outages across the US battered by a series of storms and hurricanes. Buoyant demand forced Asian PVC producers to keep more volumes of EDC for captive use. As a result, EDC supply within Asia remained tightened with offers largely raised above USD 230 per tonne CFR Southeast Asia. Buyers, particularly from Southeast Asia, saw a significant recovery in Q3 as coronavirus-related restrictions were largely eased and downstream PVC demand from construction and manufacturing activity was seen regaining the lost momentum.
Europe
The European Ethylene Dichloride (EDC) demand rose as the consumption by the downstream PVC manufacturers rose on the back of rebounding construction demand which had tumbled significantly in Q2 because of the dented economics. Lack of export volumes as inflows from the US remained largely nil triggered a sharp surge in the regional pricing. Traders maintained the margins low as the demand is yet to reach the pre-pandemic levels amid fears of second wave triggering fresh lockdowns in several states. FOB NWE EDC prices were assessed around USD 350 per MT levels, extending significant gains observed on Q-o-Q basis.
